Branded Goods Sold Without Authority Can Lead to Prosecution

March 16, 2017

Branded Goods Sold Without Authority Can Lead to Prosecution

It is well known that the sale of counterfeit goods is a criminal offence and prosecutions are by no means unusual. A recent case looked at the position in which goods protected by a registered trade mark are offered for sale with the brand owner's branding, but by someone who is not authorised to sell them.

Goods sold this way are called 'grey goods' and their presence in the market is normally the result of their being imported from foreign markets where they are sold at significantly lower prices.

The case was brought as a preliminary matter to ascertain if the Trade Marks Act 1994 could be interpreted to mean that a criminal offence is committed 'where the proprietor of the registered trade mark has given its consent to the application of the sign which is its registered trade mark, or has itself applied its own registered trade mark, to the goods, but has not given its consent to the sale, distribution or possession of them'.

It was brought because the owner of the trade mark alleged that another company had been 'unlawfully selling in the United Kingdom branded goods by Ralph Lauren, Adidas, Under Armour, Jack Wills, Fred Perry and others' which were manufactured in countries outside the European Union and which were sold to the grey importers by the factories which made them without the authority of the intellectual property holder.

The case ended up in the Court of Appeal, which ruled that an offence could be said to have been committed.

The counterfeiting and unauthorised resale of branded goods is a major headache for brand managers and this case confirms that there are criminal as well as civil (restitutive) measures that can be taken for breaches.